Zeon will invest roughly 7 billion yen ($57.8 million) to build a second factory in Singapore for S-SBR, a type of synthetic rubber favored by tire makers boosting their production of fuel-efficient tires. Once that factory is running in 2016, Zeon will be able to produce 70,000 tons of S-SBR a year in Singapore, exceeding the 55,000-ton capacity of its Tokuyama plant in Japan‘s Yamaguchi Prefecture.

The global market for fuel-efficient tires is forecast to grow by 60% between 2012 and 2017 to $70 billion. By 2019, Bridgestone alone aims for sales of over 10 million such tires, or roughly double the amount of 2013. Zeon sees this translating into 7-8% annual growth in demand for S-SBR, with around 1kg used per tire.

The company opted to expand capacity in Singapore because the plants there are just a pipeline away from the basic ingredient butadiene, available in stable supplies from a nearby refinery operated by Royal Dutch Shell.

Zeon is one of four Japanese companies that together hold the lion‘s share of the global market for S-SBR. JSR, Asahi Kasei and Sumitomo Chemical also are expanding their production capacity for this kind of synthetic rubber.

Possible discontinuance of UK production
Zeon announced it‘s subsidiary Zeon Chemicals Europe Ltd. in Sully, Wales, is considering the discontinuation of its synthetic rubber production operation and has entered into consultations with its employees (about 80) regarding this. The primary reasons for the consideration are the uncertainty in long term availability and supply of primary raw materials to the UK site and, in second, changing market conditions.

(dw)